Monitise steadies business by cutting costs and stems outflows

Troubled tech group Monitise has cut costs and stemmed outflows as management attempts to steady the ship after a rocky year. 

Monitise has forecast revenues for the year to June 30 to reach £88-90m, thanks to “materially lower” operating and capital expenses in the second half. 

 

As a result, second half losses should also narrow. 

 

It has £88.6m gross cash, which “shows a material reduction in second half cash outflows over first half, and provides balance sheet strength to see Monitise through to break-even and beyond”, the group said. 

 

Monitise management predicts it will make a profit by the 2016 full year.

Once held up as the darling of small caps, Monitise has had what you might call a challenging year since it first missed revenue expectations, leading the company to implement a strategic review, which included the possibility of selling itself off. Monitise's share price began a downward descent that seven months later has left the stock down 60 per cent. 

 

Two months later founder and joint chief executive Alastair Lukies left, and the sale was taken off the table, prompting its share price to tumble even further. 

 

In light of the ongoing review, Buse said today it had become “increasingly clear that there are two distinct types of business within Monitise”: firstly standardised platforms built around cloud-based API – which is expected to be “the key driver of our future growth and profitability” and customised platforms, built for specific customers and clients.  

 

Buse said: "We have delivered a solid revenue performance in what has been a difficult year. Across the business, our cost disciplines have improved, we are taking the necessary tough decisions and our path to profitability is on track. 

 

“Central to our growth plans is our new API-based platform launched in April, we have been delighted with its technical capability and the reception it has received from clients, which gives us confidence for the future."